Emerging risks: what’s changed and why it matters
When it comes to emerging risks, the importance of open conversations between brokers, clients and insurers has never been more critical. New technologies, new ways of working and the push for sustainability are colliding with long‑standing risks, changing how losses happen and how severe they are.
At the same time, inflation, supply chain fragility and climate volatility are stretching recovery times and increasing the cost of getting back to business. In this environment, it’s becoming increasingly challenging for clients, brokers and insurers to stay one step ahead of their exposure and mitigate risks that may not yet be fully understood.
“You don’t need to have all the answers upfront,” says Justin Linney, Head of Risk Management, UK Commercial at Aviva. “What matters is starting the conversation early, even in the face of uncertainty, so we can work out how to protect clients as effectively as we can.”
Risks behaving badly: when incidents don’t stay contained
“It’s easier to anticipate the aftermath of traditional risks such as fire, flood, theft and physical accidents, rather than the effects of more intangible, multilayer risks,” says Calvin Marshall, Portfolio Underwriting Manager, UK Commercial at Aviva.
The reliance on technology and complex supply chains perfectly show how interconnected risks can escalate, with a single incident creating wide‑reaching impacts.
A cyberattack on a single business can quickly evolve into a business interruption crisis for firms throughout the supply chain, even if their systems aren’t directly affected. The 2025 Jaguar Land Rover cyberattack, for example, is estimated to have affected more than 5,000 businesses and cost the UK economy over £1.9 billion.1
Many businesses have strengthened their cyber defences without considering the indirect risks posed by a critical supplier or customer.
“Realistically, it isn’t possible to eliminate all exposures,” adds Calvin. “As with any risks, businesses that engage in resilience planning are better positioned to respond to challenges. Insurance is part of the solution; it works best alongside informed decision-making and practical risk management. That’s something brokers and insurers can help customers with, too.”
Working together to close the gap
As new technologies are added to existing operations, it becomes harder to assess risks on their own, increasing the chance of missing major exposures. Regulation, industry standards and loss data often lag behind what's happening on the ground.
“Risks continually evolve and change, so, as an insurer, we’re always learning,” says Justin. “It’s a three-way conversation between us, brokers and customers to spot new challenges and to make sure cover and protection measures meet their needs.”
The direct result of some of these conversations, as well as claims data analysis, are enhancements to cover. For example, when involved in a fire, lithium-ion batteries can create a toxic runoff. As more businesses use lithium-ion batteries, we now offer clean-up costs to remediate pollution or contamination from the insured’s premises following damage.
Supporting the UK’s green transition
As we work towards trying to achieve Net Zero by 2040, making sure that our customers can adopt new technologies and solutions safely is a priority.
“While innovations, such as low-carbon concrete, offer improved environmental sustainability, they’re challenging to assess from a risk point of view,” says Justin. “Innovation is moving faster than regulation. So, we’re supporting clients and brokers to make better informed decisions by sharing what we know and don’t know.”
It’s especially critical when environmental solutions are used at scale. For example, modularisation, as used in modern methods of construction, delivers reduced carbon, lower construction costs and greater energy efficiency. However, there’s also a greater risk of loss from fire or water, and damaged modules are costly to repair.
“By identifying the hazards, we can make sure there is a specific risk management plan in place,” says Justin. “The answer can be higher mitigation built in early to protect lives and property, while still addressing sustainability.”
Getting the balance right for clients and the climate
It’s common for commercial sites to have a range of systems, including battery energy storage solutions, solar panels, electric vehicle chargers, localised wind turbines and more. It can be a confusing picture for brokers to identify and report what constitutes a material risk-feature.
“A good example is that an experienced broker would identify and disclose the presence of a bio-mass boiler at a client’s premises,” says Calvin. “A battery energy storage system might not get highlighted in the same way. If it’s part of a solar installation, does it get reported separately?”
A lack of standardisation and regulation across different installers compounds the problem. One site could have multiple installations from different suppliers, each with its own maintenance program and intervals for replacing key components.
As these technologies become more widely adopted, the consequences of failure become harder to ignore. We now have specialist renewable energy risk consultants to help our clients, and loss of income from renewable energy installations is now a standard cover for Mid-Market Property Owners policies.
“We also want to take a more environmentally conscious approach to resolving a loss,” says Calvin. “We’ve enhanced cover for sorting and recycling debris after a claim, and rebuilding or replacing plant or machinery in an energy efficient way.”
Reassessing the old risks: why yesterday’s risks cost more tomorrow
Emerging risks aren’t the only challenge brokers and clients face. Long-standing risks are also changing, often in ways that exacerbate losses and complicate recovery.
Climate change is a clear example. Shifting weather patterns are increasing both the likelihood and impact of extreme events, from flooding to prolonged drought, putting pressure on property, supply chains and business interruption alike. Underinsurance, an industry-wide issue, has been intensified by a perfect storm of factors. It’s not just inflation; planning delays, skills shortages and globalised supply chains are extending rebuild and replacement times.
“The principal risk isn’t just the damage itself,” says Calvin. “It’s how long it takes a business to recover, and whether their cover still reflects the reality of rebuilding, reinstating or repairing equipment and replacing lost income in today’s world.”
We’re always looking at ways to support better decisions around underinsurance, offering educational resources and practical measures, including:
- Supporting Mid-Market property owners to keep their rebuilding sums insured up to date by waiving additional premiums until next renewal where a building declared value is increased following a RICS valuation
- Extending the business interruption indemnity period to 24 months on selected Fast Trade products at no extra cost
- Providing free access to tools such as the Business Interruption Calculator
- Integrating underinsurance assessment tools to flag potential gaps in cover automatically
The broker’s role in managing modern risk
By understanding how clients are changing their operations, questioning assumptions about what is and isn’t material and sharing those insights early, brokers can really help clients be best placed to navigate emerging risks.
“Brokers play a critical role in connecting operational reality with underwriting insight and claims experience,” says Justin. “What they see and hear from their clients is invaluable. It helps us all to pool our knowledge and learn from each other.”
Emerging risks require a willingness among all parties to engage with the challenges, benefits and limits of knowledge. We’re working with specialists, universities and researchers to understand the strengths and limitations of new materials, technologies and methods.
We’re also listening to brokers and clients to understand their needs, whether they’re looking to install hydrogen-powered heating or to reduce the carbon footprint of a new build.
“It’s hard to underestimate the importance of getting this right for brokers, clients and the environment,” says Calvin. “We’ll continue to share insight, invest in learning and refine our approach as risks evolve. But we can’t do it in isolation. Emerging risks demand collaboration to deliver sustainable solutions for insurers, brokers and ultimately customers.”